Car Insurance

RUPERT Murdoch’s satellite broadcaster BSkyB has begun renegotiating its 1.1 billion Premier League contract, which expires at the end of next season.

A new offer has to be pitched by Friday but is expected to cost substantially less than last time, with some estimates claiming the final figure could be lower than 700 million.

Brokers say English football’s gravy train has hit the buffers, but the subsequent downturn in costs will be good for the company, which wants to charge pubs more for the privilege of allowing their customers to watch live topflight football. US securities house Morgan Stanley is fairly upbeat about prospects for the broadcaster and has raised its recommendation from equal weight to overweight while lifting its target price more than 100p to 770p.

Analyst Sarah Simon says: “We believe that now is the time for investors to harvest free cashflow and earnings growth, before another reinvestment cycle begins.” BSkyB rose 71/2p to 6921/2p.

Share prices traded in a narrow band with Wall Street running into early profit-taking this afternoon. The FTSE 100 index fell 14.8 to 4060.0. BT dipped 6p to 1901/2p after house broker Cazenove downgraded from buy to long-term buy.

AstraZeneca gave up yesterday’s gains with a fall of 80p to 2485p ahead of tomorrow’s review of its fat-busting drug Crestor by the US Food and Drug Administration. GlaxoSmithKline shed 15p to 1208p as investment bank Lehman Brothers assessed the impact of new accounting policies on drug companies.

There are also fears of cheap generic competition for its antidepressant Paxil.

MFI rose 131/2p to 1771/2p as Smith Barney raised its target price from 175p to 215p with an outperform rating.

John Brown, retiring chairman of William Hill, has sold four million shares at up to 2871/4p, but the bookie rose 43/4p to 2931/ 4p.

Land Securities firmed 10p to 802p after Goldman Sachs raised its rating on the property developer from inline to outperform. The broker estimates the property sector could generate equity returns of about 9% compared with expectations of 7%-8% for the broader European market. But Goldman downgraded British Land, down 41/4p to 4731/2p, from inline to underperform, saying the shares looked fully valued.

Northern Rock retreated 15p to 685p as US investment bank JP Morgan cut its 12-month target from 700p to 600p. Insurance giant Prudential, up 151/4p at 406p, refused to comment on reports that it plans to sell its internet bank Egg, down 2p at 130p.

Black-cab maker Manganese Bronze jumped 61/2p to 851/2p. The recent sharp rise in its price has forced the company to concede it is in talks regarding “possible transactions”. That might include the sale of its loss-making motor parts business.

AIM-listed Invox added 221/2p to 193p after saying it expects full- year profits to exceed the 5.5 million forecast by house broker Seymour Pierce.

Some say it will be nearer 6 million. Invox supplies a service enabling customers of direct mail companies to ring in and collect their prizes. It is run by former financial journalist Stephen Hargrave and financier Nigel Wray.

This week’s newspapers brought the usual batch of stories about problems in the NHS. On Tuesday alone, the headlines included “NHS in shock as boss resigns,” “GP tells sick not to call dangerous NHS helpline,” and “Manchester tops health authorities sick list”. With a constant flow of stories like that confronting them, it is small wonder that more and more Britons want to ensure they will qualify for private hospital treatment if their own health collapses.

Industry figures show that there were 3.2 million people in the UK with private medical cover in 1997, compared to just 2.5 million 10 years earlier - an increase of 28 per cent.

David Ashdown is a director at Western Provident Association, one of the UK’s five biggest health insurers. He says: “With all the problems that have been highlighted in the NHS, more and more people are thinking they will have to look at the alternatives.”

Pursuing those alternatives means buying a private medical insurance (PMI) policy. These plans all concentrate on the same core areas of professional fees, hospital charges, specialist treatment and drugs. The cover they provide means policyholders can avoid NHS waiting lists for a wide range of routine operations, and enjoy a little extra comfort during their hospital stay.

The plans on offer fall broadly into two groups: comprehensive schemes and budget schemes. Comprehensive policies, the more expensive option, will cover all the hospital-related costs mentioned above, plus the cost of any outpatient treatment you may need. Budget policies exclude many (if not all) outpatient treatments and may entitle you to private hospital care only if NHS waiting lists reach a certain length.

This issue of price has led PMI to a crisis of its own. The more expensive premiums become, the more people decide they cannot afford PMI. Those left in the market tend to be the very customers who are most likely to make a claim, which drives premiums up.

Most of the policies in the latest generation of PMI plans have set about trying to break this cycle. Ashdown says: “We have got to bring premiums down if people are going to have any form of cover at all.”

JOHNSON MATTHEY is cleaning up. In both Europe and the US, new legislation is forcing the manufacturers of heavy-duty diesel vehicles to cut engine emissions. It is the industrial equivalent of the introduction of catalytic converters as standard to cars in the 1990s, and Johnson Matthey - which makes the chemicals used as catalysts - is expected to enjoy some impressive sales growth over the rest of this decade as a result.

Indeed, the company operates in several exciting medium- and long- term growth areas. It has a strong business, making ingredients for drugs, when an ageing population guarantees there will be growing long-term demand.

And buyers of Johnson Matthey shares are also taking an option on the emergence of fuel cell technology in which hydrogen can be used as an alternative to traditional energy sources. The group makes parts for experimental fuel cells in a division that could break into profit soon and be a dramatic plus to the group in the long term.

Johnson Matthey’s balance of prospective growth and modest 3 per cent dividend yield makes the shares look compelling. Buy and tuck away.

Insurance buyers have been holding their breaths for more than two years waiting for the “insurance cycle” to change, signaling a return to higher insurance pricing, policy restrictions and cancellations. All indications point to the unfortunate reality that the change has occurred. Wholesaler-distributors in all parts of the country are reporting that, at best, prices have firmed, and, on average, property, general liability, commercial auto and workers compensation rates are being increased 15 percent to 20 percent.

“Long-tail business” such as product liability and workers compensation where claims payout does not occur until many years after the event that causes the loss, seem hardest hit. Wholesaler-distributors with some of the more difficult product liability exposures have been hit with rate increases of 100 percent and more.

While small and medium-sized corporate insurance buyers have benefited most from the insurance price cutting of the past several years, they are also likely to be the hardest hit when rates begin their upward spiral. The insurance industry, as a whole, never seems to price its product accurately. Over several decades, general price levels have either been excessive or inadequate.

A string of bleak economic data published this week has raised fears that Britain may be heading towards recession for the first time in 15 years. With inflation already at a nine-year high, growth at a 12- year low, and the number of high street retailers reporting a decline in sales, at a 22-year peak, the statistics, at the very least, point to some hard months ahead.

Below, we take a look at 10 ways to tighten your belts and avoid the worst effects of the economy’s slowdown. From mortgages to phone bills, Britain’s consumers are wasting billions of pounds a year simply by not shopping around.

MORTGAGES

If a deeper economic slowdown, or recession, really is on the cards, interest rates are likely to rise. This week’s news that inflation is riding at a nine-year high of 2.4 per cent is likely to set alarm bells ringing for the Bank of England’s Monetary Policy Committee (MPC) ” whose job is to keep inflation below 2 per cent.

If rates do rise, then the best way to prepare yourself on the mortgage front, is to take advantage of one of the competitive fixed rates which are still available. But any clear signs that the MPC is to raise rates could ensure that the best deals are removed from the market within days.